Another One Bites The Coal Dust - Alpha Natural Files For Bankruptcy

Amid the collapse in coal prices, not helped by the 'China situation' and President Obama's nudge, WSJ reports that the ailing US coal just got another black eye as Alpha Natural Resources is expected to file for chapter 11 bankruptcy protection early Monday to cut its more than $3 billion debt load. After four straight annual losses, Alpha - one of America's largest coal producers - has secured $692mm in DIP financing as it prepares its restructuring plan expected to sell some of the best mines and shutter others. It appears the Arch Coal's CEO's ominous words last week were prophetic - “Coal markets are as difficult as I’ve seen them during my 30 years in the industry."

Alpha Natural Resources Inc. is expected to file for chapter 11 bankruptcy protection early Monday to cut its more than $3 billion debt load, according to people familiar with the matter, as a severe slump in coal prices continues to wreak havoc on the industry.

The Bristol, Va., company, one of the largest U.S. coal producers, hasn’t completed the terms of a restructuring plan but will likely sell some of its best mines or turn them over to creditors and close others during its trip through bankruptcy court, the people said.

Alpha has secured as much as $600 million in bankruptcy financing from senior lenders and secured bondholders to fund its operations during its chapter 11 case, some of the people said.

A steep drop in coal prices has Alpha and its rivals bleeding cash and choking on debt taken on to finance acquisitions around the start of the decade, when the industry’s outlook was rosier. In 2011, Alpha paid $7.1 billion for rival mining company Massey Energy Inc., a deal that extended Alpha’s lead as the largest miner of the type of coal used in steelmaking.

ut the price of metallurgical coal has hit an 11-year low amid an economic slowdown in China, the world’s largest producer of steel. Thermal-coal prices have also plummeted as power plants switch to abundant and relatively clean-burning natural gas.

The slump has a number of coal companies at risk. Walter Energy Inc. filed for bankruptcy protection last month with a plan to hand control of the company to senior creditors, after chapter 11 filings by Patriot Coal Corp. and Xinergy Ltd. earlier this year. Arch Coal Inc., meanwhile, is working with bankers and lawyers who specialize in helping struggling companies, The Wall Street Journal has reported, and is facing lender pushback on a proposed debt-for-debt exchange meant to reduce its borrowings and interest costs.

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But but but low commodity prices are unequivocally good for America right?

Quick, Obama. Jump on EPA regulations for already planned shut downs of coal plants so that you can't take credit for cleaning up the industry. Don't let anyone think they shutdown because they were already money losers.

Mary Nichols. She’s the rich leftist hypocrite who has run the California Air Resources Board since 2007. After graduating from Yale, she went to work for the Center for Law in the Public Interest where she became the air pollution specialist. She became involved in some of the first cases regarding the just-passed federal Clean Air Act before segueing to government work.

Governor Schwarzenegger appointed her chairman of the Air Resources Board in 2007 and Governor Brown re-appointed her on January 5, 2011, but in the interim Nichols received heavy criticism for her stock holdings. Her investments included shares in Chevron, Royal Dutch Shell, BP PLC, a Bermuda shipping company that transports crude oil and the world's largest coal company, Peabody Energy Corp, according to the Associated Press. "Five of the investments, including the Chevron stock, are worth as much as $1 million, according to a financial disclosure report Nichols filed recently with the state Fair Political Practices Commission."

After the news media reported Nichols’ stock holdings, she announced that she would put her oil stocks in a trust.

You forgot to mention that Californians pay the highest gas taxes in the country at 60.75 cents per gallon. Since January 1, Californians also pay a global warming fee on top of gas taxes as part of the Democrat's Cap and Trade Program. Since this hidden gas tax went into effect on Jan. 1, it has generated more than $1 billion for a greenhouse gas reduction slush fund for bureaucrats’ untested, unproven projects and resulted in a 13-cent-a-gallon increase in gas prices. The nonpartisan Legistlative Analyst Office estimates that the program will likely add 13 to 20 cents per gallon by 2020, though the price hike could top 50 cents. Others say it could be as much as 76 cents.

You also forgot to mention that California's Air Resources Board has regulations that require custom "cleaner" blends of gasoline that other states don't have in their fuel distribution. California is a “fuel island” and has no pipelines linking it to petroleum or crude oil supplies, but instead must import an increasing share of fuel from shrinking domestic and distant international sources. The state’s refining capacity has stagnated for decades despite a rapidly growing demand for gasoline. California’s “differentiated” fuel standards cause a continual risk of “supply outages”.

Because the custom "cleaner" blends of gasoline are sold only in California, the state has become a separate market for gasoline. More than ever, California gas prices are determined by how much gasoline is made there and how much Californians want to buy.

Look. You can be a troll for all that I care. I know that you must maintain a Corporate Image. I know that your Public Relations people TROLL these websites and post in attempt, vainly, to contain the damage.

But, and I know that you probably do not believe in God, but in the minor chance that yu do, WHEN YOU CONTINUE TO PROMOTE LIES...ESPECIALLY FOR A PAYCHECK...that you have NO HOPE FOR ETERNAL SALVATION as Hebrews Chapter 10, Verse 26, is quite clear about that...

It states, "If we deliberately keep on sinning, after we have received the knowledge of the truth, no sacrifice for sins is left but only a fearful expectation of judgment and of raging fire that will consume the enemies of God."

So will you trade yur soul, to Satan, for a paycheck now?

If you do believe in God then you are possibly called...BUT YOU ARE NOT CHOSEN, as you already have made that trade. And that is some pretty sad shoes to be standing in when the Day of Judgment happens.

Look, you can try to blame me and incorrectly label me as a corporatist for explaining to you why there are more reasons than those evil oil companies as to why gas prices are higher in California than any other state.

Admit it, California is a fucked up one-party state with high taxes and oppressive regulations.

It's not your fault that you're a typical clueless uninformed SoCal dolt who is mostly focused on important stuff like the Kardashians.

Now go pay some moar taxes so that California's hordes of illegal dreamers can get their free college tuition.

This is one promise El Presidente has kept, well this one and the other one about fundamentally transforming America. He just failed to say what America would look like when he was done. Third world shithole comes to mind.

Yawn. Coal will remain where it is, ready for use if and when somebody can figure out how to do so and make a profit. Making a profit will first involve a complete reset of the labor costs, something that has happened already to countless other industries, large and small.

The Big Reset just about everybody here is expecting, and the collapse of the debt house of cards will trigger bankruptcies throughout corporate America. Alpha Natural is just avoiding the bottleneck that will ensue with bloated BK court dockets and a huge shortage of competent corporate bankruptcy attorneys, who already charge abnormally high hourly fees in the present relatively calm conditions. Besides, filing now means that DIP financing can be found. After the Big Reset, that probably won't be the case, and Chapter 7 will be the only option. In Chapter 11 you can slip through the process and keep your managerial position and ridiculous pay packages despite having guided your corp. downwards into bankruptcy, wiping out the equity shareholders. In Chapter 7, you are fucked and unemployed.